Ritu Goel & Anr. vs. Kamlesh & Ors.
Background
A husband and wife (plaintiffs) paid over Rs. 1.4 crore in installments to the appellants (a family running a neighbouring shop) over several proposed property deals in Rohini, Delhi, none of which ever materialized into a valid transfer. When the deals fell through, the appellants issued four post-dated cheques worth Rs. 1.22 crore towards repayment, all of which bounced when the underlying bank accounts were blocked amid separate loan-default (SARFAESI) proceedings. The plaintiffs sued for recovery and won an ex-parte decree at trial, which two of the defendants appealed, claiming they were never properly served.
Decision Breakdown
The High Court dismissed the appeal, holding that the appellants had in fact been duly served, both had executed vakalatnamas (formal authorizations) for lawyers in the trial court, directly contradicting their claim of non-service. The Court found the appellants had knowingly participated in the fraudulent scheme, noting one appellant had personally signed receipts for large cash sums. The Court also rejected a separate application by one appellant to withdraw the appeal (in order to instead pursue a different legal remedy), calling it a "malafide attempt" to escape the decree, and imposed Rs. 10,000 costs. The Court further directed that a copy of the judgment be sent to the Income Tax Department to examine whether large cash payments violated tax law.
Lesson Learnt
Signing a vakalatnama (lawyer authorization) in a case is treated as proof you were properly notified of the proceedings: you cannot later claim you were never served. Courts also scrutinize attempts to withdraw an appeal at a late stage as a tactic to dodge an unfavourable decree.